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Mobile Subscribers Yearwise comparision

Strong Growth - Global Wi-Max aims to build a mass market

March 15, 2010
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In the face of stiff competition from other cellular technologies, Wi-Max seems to be holding its own. Mobile Wi-Max is all but replacing fixed Wi-Max in new deployments and commercial Wi-Max networks, planned networks and networks under development are increasing every month.

While 2007-08 will be known as the year when Wi-Max turned the corner, registering a 91 per cent growth in its subscriber base, in 2009, the technology maintained the strong growth momentum.With over 4.73 million global broadband wireless access/Wi-Max subscribers in September 2009 and 200 operators deploying Wi-Max networks, this technology has witnessed a year-on-year growth rate of over 80 per cent, according to telecom market research firm Maravedis.

Moreover, mobile Wi-Max (802.16e2005), which has moved through standardisation, productisation, and interoperability testing and certification over the past few years, has grown at a rapid clip, overtaking the number of fixed Wi-Max subscribers globally. Large-scale mobile Wi-Max network deployments are now a reality. However, while there is a strong market for mobile Wi-Max infrastructure, success in the sales of Wi-Max infrastructure is not likely to be reflected in the overall earnings of vendors as Wi-Max revenues are still dwarfed by the sales of traditional cellular infrastructure.

Market size and growth

In spite of the financial downturn impacting telecom investments, there have been 519 Wi-Max deployments across 147 countries. Of the 519 Wi-Max deployments, 112 were added in 2009.

While Clearwire is the posterboy for Wi-Max in the US, the key operators elsewhere include Yota in Russia, Inukshuk in Canada, Korea Telecom, PacketOne in Malaysia and Telmex in Mexico.

Besides the increase in Wi-Max network deployments, many established WiMax networks have rapidly expanded. Yota in Russia has over 250,000 active commercial users on its Wi-Max network, and has passed the break-even point primarily due to its daily subscriber additions of over 2,000. Clearwire, with over 550,000 subscribers, covers more than 30 million consumers in over 30 markets and generates an ARPU of $40. Meanwhile, UQ Communications in Japan covers over 50 per cent of the country's population and provides services via 20 mobile network operators.

Equipment vendors also witnessed tremendous growth in 2009. While Huawei achieved a 200 per cent increase in its WiMax revenues, Alvarion supplied more than 260 commercial networks in 100 countries, and Motorola shipped over 1 million WiMax customer premises equipment (CPE) and 10,000 Wi-Max access points.

According to the WiMAX Forum, WiMax service providers offer networks covering more than 620 million people or points of presence (PoPs) in 147 countries, and are set to cross the forecasted 800 million PoPs by end-2010. The WiMAX Forum highlights the following points on a region-wise basis:

  • Asia-Pacific leads with more than 237 million PoPs and 100 network deployments.
  • Central/Latin America has reached 113 million PoPs and 109 deployments.
  • Africa/Middle East covers more than 108 million PoPs with 142 deployments.
  • Europe covers 115 million people with 153 deployments.
  • North American coverage has reached 47 million PoPs with 51 deployments.

    In Western Europe, with the established service providers committed to providing 3G network solutions based on legacy GSM technology (HSDPA) and, in the future, to long term evolution (LTE), and only 10 per cent of the West European population left uncovered by 3G, Wi-Max struggled to gain a foothold in this market till end-2008. The technology competed primarily in the fixed wireless access space, and was used mainly to supplement wireline service to reach rural areas with operators like Telenor, Iberbanda and Banda Ancha in Spain, Clearwire in Belgium and Spain, and Danske Telecom in Denmark targeting underserved regions.

    However, the adoption of this technology witnessed rapid growth in the following year, primarily due to an increase in spectrum allocations in 2009. Ireland is a perfect market for Wi-Max due to its low broadband penetration rate. Operator Imagine gained access to 3.4/3.6 GHz spectrum towards end-2009, and has recently launched commercial services. The company has been successful with a large number of consumers migrating to Wi-Max. By mid-2010, it will start delivering nomadic Wi-Max services via dual-mode WiMax/HSPA dongles and embedded laptops.

    In the US, Clearwire's Wi-Max service, Clear, is available in Baltimore, Atlanta, Las Vegas, Portland, Oregon, Texas, Idaho and Washington. The company plans to offer services to 120 million customers in 80 US markets, including New York, Boston, Washington DC, Houston and San Francisco by end-2010.

    Besides Clearwire, AT&T, Inc. has rolled out Wi-Max service in Alaska and Intel is working with Clearwire to launch the Wi-Max Innovation Network in California's Silicon Valley to serve as a test environment for mobile application developers with companies like Google, Inc.

    Although most of the current Wi-Max rollouts are aimed at urban areas, smaller wireless internet service providers are bringing Wi-Max to areas that have a strong demand for broadband but lack wired infrastructure. The DigitalBridge Communications Corporation, a rural Wi-Max operator based in Ashburn, Virginia, and Open Range Communications, Inc. in Greenwood Village, Colorado, are using funds from the $7.2 billion rural broadband stimulus programme to build rural Wi-Max infrastructure.

    However, mass Wi-Max deployments are still not moving quickly. AT&T has had some difficulty with deployments in Alaska, and Clearwire's deployment in Portland and Oregon had a time overrun of almost a year.

    Meanwhile, the Asia-Pacific region remains at the forefront with this technology rapidly gaining ground in 2009. While tier 1 operators such as Japan's KDDI, India's Tata Communications and Korea Telecom have invested heavily in the technology, the region is also home to many maverick Wi-Max operators who are pioneering wireless broadband use among non-incumbent operators.

    According to industry analysts, this may also be attributed to the fact that much of this region still lacks 3G spectrum and broadband connectivity vis-à-vis other mature markets in Europe.

    According to Frost & Sullivan's 2009 Asia-Pacific Wi-Max report, the Wi-Max subscriber base in the region –­ covering 17 countries excluding China –­ could top 24 million by end-2014, with billings reaching nearly $6.4 billion.

    In Latin America, Brazil is emerging as a dynamic Wi-Max market with a very mobile-oriented population. According to industry experts, Wi-Max has the opportunity to become the primary broadband network in Brazil.

    Key trends

    According to industry experts at ABI Research, there can be significant differences among Wi-Max providers across different regions. While some operators have been focused on fixed services for homes and businesses, others are jumping feet first into mobile Wi-Max, offering a variety of external modems, laptops, netbooks and even handsets tied with HD multimedia services, as with Yota in Russia. A few operators have little fixed or mobile broadband competition, while others are competing directly with fixed and mobile broadband services.

    While Japan's UQ Communications has been lagging in terms of subscriber expectations, Clearwire is stepping up the pace of its network deployment. Some are satisfied with local coverage, while others such as Clearwire and Yota have been building networks globally.

    Many operators have finalised plans to migrate to full mobility Wi-Max over the next couple of years. Voice over internet protocol (VOIP), CPE and device subsidisation, and an emphasis on prepaid and ad hoc pricing have also become integral service components for many operators.

    According to industry experts at Infonetics Research, the majority of operators intend to offer VOIP over Wi-Max services by 2011, indicating the strong potential of voice over Wi-Max as an additional highvalue revenue stream for operators.

    Moreover, an increasing number of GSM operators are entering the Wi-Max market, seeking to leverage their trusted consumer brand by offering basic broadband services, and Wi-Max offers a more cost-effective delivery option for them.Currently, 95 2G operators are providing Wi-Max services.

    According to Maravedis, over 80 per cent of Wi-Max operators have been offering unlimited data plans vis-à-vis only 41 per cent 3G operators. This has been possible primarily due to the better performance of Wi-Max networks and more efficient usage of spectrum. Wi-Max operators have also reported some of the heaviest usage on their networks. The usage has been more than 10 GB and nearly 8 GB per month for Yota in Russia and Packet One in Malaysia respectively.

    In emerging markets like Brazil, Indonesia and Russia, this technology has been particularly successful. In some of these markets, voice over Wi-Max is being viewed as the key application, but eventually, Wi-Max will be used to deliver multimedia and higher bandwidth. In India, the largest potential market for Wi-Max, delay in spectrum auctions has been a key hurdle in the deployment of this technology.

    Many companies in the developing markets, including the incumbents, are betting on Wi-Max. An option being considered by operators in the developing markets is a combination of Wi-Max and GSM. In Russia, for instance, HTC sells a Wi-Max phone which supports traditional 2G wireless technologies. Wi-Max is used exclusively for multimedia and broadband on this device, a strategy that could become popular in other markets too.

    The Wi-Max ecosystem has improved in the past year with over 178 mobile WiMax products achieving certification in 2009 and 10 products being certified in January 2010. The WiMAX Forum estimates that by 2011, over 1,000 products certified by it will be commercially available. New devices are driving the market today with the availability of USB dongles and mobile PCs with embedded Wi-Max, and Wi-Max-enabled cellular handsets.

    Currently, there are more than 25 WiMAX Forum member companies manufacturing Wi-Max base stations, and 45 that are CPE and end-user device suppliers. The Wi-Max chipset market has also gained significant ground in the past two years with the Wi-Max chipset technology moving beyond multiple chips, each with one specific function to a market where integrated single-chip solutions and modules are vendors' and manufacturers' preference. A small group of semiconductor manufacturers has come up with innovative single-chip solutions.

    Clearly, this technology has taken significant strides in the past two-three years and is coming into the mass market. It is even being pitted against LTE.

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